1H2020 Results Presentation 7 August 2020 Joint Sponsors of IREIT - - PowerPoint PPT Presentation

1H2020 Results Presentation

7 August 2020

Joint Sponsors of IREIT Global:

Important Notice

This presentation may contain forward-looking statements that involve assumptions, risks and uncertainties. Actual future performance, outcomes and results may differ materially from those expressed in forward-looking statements as a result of a number of risks, uncertainties and assumptions. Representative examples of these factors include (without limitation) general industry and economic conditions, interest rate trends, cost of capital and capital availability, competition from other developments or companies, shifts in expected levels of occupancy rate, property rental income, charge out collections, changes in operating expenses (including employee wages, benefits and training costs), governmental and public policy changes and the continued availability of financing in the amounts and the terms necessary to support future business. You are cautioned not to place undue reliance on these forward-looking statements, which are based on the current view of management on future events. The information contained in this presentation has not been independently verified. No representation or warranty, expressed or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained in this presentation. Neither IREIT Global Group Pte. Ltd. (the “Manager”) or any of its affiliates, advisers or representatives shall have any liability whatsoever (in negligence or

• therwise) for any loss howsoever arising, whether directly or indirectly, from any use, reliance or distribution of this

presentation or its contents or otherwise arising in connection with this presentation. The past performance of IREIT Global (“IREIT”) is not indicative of the future performance of IREIT. Similarly, the past performance of the Manager is not indicative of the future performance of the Manager. The value of units in IREIT (“Units”) and the income derived from them may fall as well as rise. Units are not obligations of, deposits in, or guaranteed by, the Manager or any of its affiliates. An investment in Units is subject to investment risks, including the possible loss of the principal amount invested. Investors should note that they will have no right to request the Manager to redeem or purchase their Units for so long as the Units are listed on the Singapore Exchange Securities Trading Limited (the “SGX-ST”). It is intended that unitholders of IREIT may only deal in their Units through trading on the SGX-ST. Listing of the Units on the SGX-ST does not guarantee a liquid market for the Units. This presentation is for information only and does not constitute an invitation or offer to acquire, purchase or subscribe for Units. 2

Agenda

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About IREIT Global Slide 4 Key Highlights 6 Portfolio Summary 14 Proposed Acquisition 18 Looking Ahead 22 1 2 4 3 5

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1 About IREIT Global

Berlin Campus

About IREIT Global

5 Investment Mandate: Principally invests, directly or indirectly, in a portfolio of income-producing real estate in Europe which is used primarily for office, retail and industrial (including logistics) purposes, as well as real estate-related assets Current Portfolio: 5 freehold office properties in Germany and 4 freehold office properties in Spain, with a total attributable lettable area of c.230,000 sqm and valuation of €629.0m1 Manager: IREIT Global Group Pte. Ltd., which is jointly owned by Tikehau Capital and City Developments Limited (CDL). Tikehau Capital is an asset management and investment group listed in France, while CDL is a leading global real estate company listed in Singapore Distribution Policy: At least 90% of annual distributable income; distributions to be made on a semi-annual basis

First Singapore-listed REIT with Europe-focused Mandate

Berlin Campus 35% Bonn Campus 18% Darmstadt Campus 14% Münster Campus 10% Concor Park 14% Delta Nova IV 2% Delta Nova VI 2% Il∙lumina 2% Sant Cugat Green 3%

Valuation by Property1

Germany 91% Spain 9%

Valuation by Geography1

(1) Lettable area and valuation based on IREIT’s proportionate interest in the respective properties

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2 Key Highlights

Bonn Campus

Key Figures At A Glance

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Portfolio Management3 1H2020 Performance Capital Management3 Distribution per Unit

• 2.7% YoY1

Annualised DPU Yield

7.9%2

Occupancy Rate

95.7%

Attributable Valuation4

€629.0m

WALE5

3.7 years

Net Property Income

+1.4% YoY

Aggregate Leverage

39.0%

Interest Rate6

1.8%

% of Loans Hedged

86.3%

(1) In S$ terms (2) Based on IREIT’s 1H2020 DPU of 2.85 Singapore cents and closing unit price as at the last trading day of 2Q2020 (3) As at 30 Jun 2020 (4) Valuation based on IREIT’s proportionate interest in the respective properties (5) Weighted average lease to expiry based on IREIT’s proportionate interest in the respective properties (6) Effective interest rate computed over the tenure of the borrowings

Key Highlights

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Healthy Portfolio

▪ 1H2020 net property income rose 1.4% YoY to €15.7m due to higher gross revenue from the new lease at Münster South Building which commenced in Jul 2019 and positive effects from the finalisation of prior year’s service charge reconciliation ▪ 1H2020 DPU was 2.7% lower YoY at 2.85 Singapore cents, impacted by weaker EUR/SGD exchange rates1 ▪ Portfolio occupancy rate increased from 94.7% as at 31 Mar 2020 to 95.7% as a result of an increase in occupancy rate in the Spanish portfolio ▪ The occupancy rate of the German portfolio and Spanish portfolio stood at 99.6% and 84.7%, respectively, as at 30 Jun 2020 ▪ Portfolio WALE remained sound at 3.7 years as at 30 Jun 2020, with 96.5% of the portfolio leases due for renewal only from FY2022 and beyond

Sound Fundamentals

▪ Financial position stayed healthy with aggregate leverage at 39.0% and effective interest rate at 1.8% ▪ Apart from the €32m term loan facility2 provided by CDL, the rest of the bank borrowings amounting to €200.8m will mature only in 2026

Stable Results

(1) The DPU in S$ was computed after taking into consideration the forward foreign currency exchange contracts entered into to hedge the currency risk for distribution to Unitholders (2) IREIT intends to repay the €32m term loan facility with the proceeds from an equity fund raising exercise at the appropriate juncture

(€ ‘000) 1H2020 1H2019 Variance (%) Gross Revenue 17,965 17,503 2.6 Property Operating Expenses (2,300) (2,061) 11.6 Net Property Income 15,665 15,442 1.4 Income Available for Distribution 12,956 12,967 (0.1) Income to be Distributed to Unitholders 11,660 11,671 (0.1)

Operating & Financial Performance

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▪ 1H2020 net property income registered a slight increase of 1.4% YoY due mainly to higher gross revenue from the new lease at Münster South Building which commenced in Jul 2019 and the positive effects arising from the finalisation of prior year’s service charge reconciliation ▪ Income available for distribution for 1H2020 was largely flat YoY at €11.7m

Distribution per Unit 1H2020 1H2019 Variance (%) Before Retention

• € cents

2.02 2.04 (1.0)

• S$ cents

3.161 3.26 (3.1) After Retention

• € cents

1.82 1.84 (1.1)

• S$ cents

2.851 2.93 (2.7)

Distribution Per Unit

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▪ DPU in S$ terms was impacted by weaker EUR/SGD exchange rates1 ▪ 1H2020 DPU of 2.85 Singapore cents represents an annualised distribution yield of 7.9% based on IREIT’s closing unit price as at the last trading day of 2Q2020

(1) The DPU in S$ was computed after taking into consideration the forward foreign currency exchange contracts entered into to hedge the currency risk for distribution to Unitholders

Distribution Details

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Distribution Period 1 Jan 2020 to 30 Jun 2020 Distribution per Unit (DPU) 2.85 Singapore cents Ex-Date 18 Aug 2020 (Tuesday) Books Closure Date 19 Aug 2020 (Wednesday) Payment Date 27 Aug 2020 (Thursday)

€ ‘000 As at 30 Jun 2020 As at 31 Dec 2019 Variance (%) Investment Properties 574,900 574,900

• Total Assets

636,464 636,377

• Borrowings

231,613 231,453 0.1 Total Liabilities 286,570 282,084 1.6 Net Assets Attributable to Unitholders 349,894 354,293 (1.2) NAV per Unit (€/unit)1 0.55 0.56 (1.8) NAV per Unit (S$/unit)2 0.86 0.85 1.2

Financial Position

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▪ The appraised value of the German portfolio remained unchanged at €574.9m despite the COVID-19 virus

• utbreak, and this has contributed to the stability in the total assets and NAV

▪ Based on IREIT’s closing unit price as at the last trading day of 2Q2020, IREIT is trading at a 15.7% discount to its NAV

(1) The NAV per Unit was computed based on net assets attributable to Unitholders as at 30 Jun 2020 and 31 Dec 2019, and the Units in issue and to be issued as at 30 Jun 2020 of 641.9m (31 Dec 2019: 638.4m) (2) Based on S$1.5658 per € as at 30 Jun 2020 and S$1.5094 per € as at 31 Dec 2019 extracted from MAS website

Capital and Currency Management

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▪ On 1 Feb 2019, IREIT drew down the new loan facilities of €200.8m maturing in Jan 2026 to repay the then existing bank borrowings of €193.5m ▪ On 3 Dec 2019, IREIT entered into a term loan facility of €32m to fund the acquisition of the 40% stake in the Spanish portfolio. The facility, which was fully drawn down as at 31 Dec 2019, will mature in May 2021. IREIT intends to repay the facility with the proceeds from an equity fund raising exercise at the appropriate juncture ▪ As distributable income in € will be paid out in S$, IREIT has implemented a policy of hedging approximately 80% of its income to be repatriated from overseas to Singapore on a quarterly basis, one year in advance As at 30 Jun 2020 As at 31 Dec 2019 Gross Borrowings Outstanding (€’m)

232.8 232.8 Aggregate Leverage1 39.0% 39.3% Effective Interest Rate per Annum2 1.8% 1.8% Interest Coverage Ratio3 7.4x 8.7x Weighted Average Debt Maturity 5.0 years 5.5 years

32.0 200.8 2020 2021 2022 2023 2024 2025 2026

Debt Maturity Profile € ’million

(1) Based on total debt over deposited properties, including IREIT’s proportionate share of its joint venture borrowings and deposited property values (2) Effective interest rate computed over the tenure of the borrowings (3) Based on the definition set out in Appendix 6 of the CIS Code revised on 16 April 2020

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3 Portfolio Summary

Darmstadt Campus

German Portfolio

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BERLIN CAMPUS BONN CAMPUS DARMSTADT CAMPUS MÜNSTER CAMPUS CONCOR PARK TOTAL

City Berlin Bonn Darmstadt Münster Munich Completion Year 1994 2008 2007 2007 1978 and fully refurbished in 2011 Ownership 100.0% 100.0% 100.0% 100.0% 100.0% Lettable Area (sqm) 79,097 32,736 30,371 27,204 31,412

200,820

Car Park Spaces 496 652 1,189 588 516

3,441

Occupancy Rate1 100.0% 100.0% 100.0% 100.0% 97.5%

99.6%

• No. of Tenants

7 1 1 2 15

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Key Tenant(s) Deutsche Rentenversicherung Bund GMG, a wholly-

• wned

subsidiary of Deutsche Telekom GMG, a wholly-

• wned

subsidiary of Deutsche Telekom GMG, a wholly-

• wned

subsidiary of Deutsche Telekom Allianz, ST Microelectronics, Ebase, Yamaichi WALE2 4.0 2.8 2.3 2.7 6.8

3.7

Independent Appraisal3 (€ m) 217.0 113.7 90.5 62.9 90.8

574.9

(1) Based on all current leases in respect of the properties as at 30 Jun 2020 (2) Based on gross rental income as at 30 Jun 2020 (3) Based on independent valuations as at 30 Jun 2020

Spanish Portfolio

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DELTA NOVA IV DELTA NOVA VI SANT CUGAT GREEN IL∙LUMINA TOTAL

City Madrid Madrid Barcelona Barcelona Completion Year 2005 and refurbished in 2015 2005 and refurbished in 2015 1993 1970s and fully redeveloped in 2004 Ownership 40.0% 40.0% 40.0% 40.0% Lettable Area (sqm) 100% (40%) 10,256 (4,102) 14,855 (5,942) 26,134 (10,454) 20,922 (8,369)

72,167 (28,867)

Parking Spaces 249 384 580 310

1,523

Occupancy Rate1 93.7% 94.5% 77.1% 82.9%

84.7%

• No. of Tenants

11 9 4 11

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Key Tenant(s) Gesif, Anticipa, E- Voluciona, Aliseda Almaraz, Clece, Digitex DXC Technology, Roche, Sodexo ÁREAS, Catalan Media, Digitex, Coca Cola European Partners WALE2 3.6 2.2 5.3 3.8

3.9

Independent Appraisal3 100% (40%) (€ m) 29.7 (11.9) 39.2 (15.7) 40.75 (16.3) 25.8 (10.3)

135.4 (54.1)

(1) Based on all current leases in respect of the properties as at 30 Jun 2020 (2) Based on gross rental income of IREIT’s proportionate interest in the respective properties as at 30 Jun 2020 (3) Based on independent valuations as at 30 Jun 2020

Blue-Chip Tenant Mix

Portfolio Summary (cont’d)

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1 Based on gross rental income of IREIT’s proportionate interest in the respective properties as at 30 Jun 2020 2 6.3% of the leases is subject to lease break option from FY2020 to FY2022

96.5% of portfolio leases1 will be due for renewal only in FY2022 and beyond2 Stable Leases

45.5% 31.4% 3.7% 3.6% 2.9% 12.8%

Key Tenants1

GMG - Deutsche Telekom Deutsche Rentenversicherung Bund Allianz Handwerker Services GmbH ST Microelectronics Ebase Others 1.2% 2.9% 30.6% 22.6% 28.9% 13.8% 0.9% 2.6% 24.9% 21.4% 35.1% 15.1% FY2020 FY2021 FY2022 FY2023 FY2024 FY2025 and Beyond

Lease Break & Expiry Profile

Based on lease break Based on lease expiry

Weighted Average Lease Expiry: 3.7 years1

ebase GmbH is part of the FNZ Group, a global fintech company. As a B2B direct bank, ebase is a full service partner for financial distributors, insurance companies, banks, asset managers and other companies. Allianz Handwerker Services is a unit of Allianz SE, one of the world's largest insurance companies. S&P’s long-term rating stands at AA. ST Microelectronics is

• ne of the world’s

largest semiconductor companies with net revenues of US$9.66b in 2018 and BBB credit rating. Deutsche Telekom is one of the world’s leading integrated telcos with around c. 178m mobile customers, c. 28m fixed-network lines and c. 20m broadband lines. S&P’s long- term rating stands at BBB+. Deutsche Renten- versicherung Bund is Europe’s largest statutory pension insurance company with

• ver 57m customers and

‘AAA’ credit rating.

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4 Proposed Acquisition

Münster Campus

Acquisition Overview

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Proposed Acquisition of Remaining 60% Stake in Spanish Office Portfolio

▪ On 7 Dec 2019, IREIT partnered with Tikehau Capital and CDL to acquire a 100% interest of a portfolio of 4 multi- tenanted freehold office properties located in the established office areas of Madrid and Barcelona ▪ The Spanish portfolio is currently held through a 40:60 joint venture (JV) by IREIT and Tikehau Capital, with CDL extending a €32m loan to IREIT to fund its 40% investment ▪ As part of the JV arrangements, Tikehau Capital granted IREIT a call option to acquire its 60% stake in the JV for 18 months following completion of Dec 2019 acquisition ▪ Today, IREIT proposes to acquire the balance 60% stake in the Spanish portfolio by exercising the call option ▪ The proposed acquisition will be funded by a rights issue whereby part of the proceeds will also be used to repay the €32m term loan facility granted by City Strategic Equity Pte. Ltd. ▪ The proposed acquisition will allow IREIT to have full

• wnership control of the high-quality Spanish portfolio,

deepen its strategic presence in Spain as well as add scale and diversification to its portfolio Spanish Office Portfolio1

Transaction Structure

40% 60% 100%

Pre-transaction

€32m loan

Post-transaction

100%

Spanish Office Portfolio1

(1) Held through one or more intermediate holding companies

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5 Looking Ahead

Concor Park

Looking Ahead

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Macro Economy

▪ The COVID-19 pandemic and ongoing geopolitical tensions, particularly that between US and China, have taken a toll on the business activity in Europe, with major economies in the region expected to fall into recession in 2020 ▪ This has led to a number of measures taken by the EU, including the approval of the historic €750bn pandemic recovery fund and new budget of nearly €1.1trn over seven years to support the European economy

Real Estate Market

▪ Amid the looming recession, the take-up in office space and investment activity in Europe is expected to slow down in 2020 ▪ However, office rents where IREIT’s properties are located are not expected to be significantly affected due to their good quality and strong local fundamentals e.g. low vacancy rates and lack of supply ▪ IREIT’s portfolio has remained resilient with a majority of the leases supported by a blue- chip tenant base. Portfolio occupancy rate has improved by 1ppt QoQ to 95.7% as at 30 Jun 2020 as a result of major new lease with ÁREAS at the Il∙lumina property in Spain

Key Focus

▪ To deepen its strategic presence in Spain and increase its portfolio strength through enhanced scale and diversification, IREIT has today exercised the call option to acquire the remaining 60% stake in the Spanish portfolio from Tikehau Capital ▪ The proposed acquisition will be funded by a rights issue whereby part of the proceeds will also be used to repay the €32m term loan facility granted by City Strategic Equity Pte. Ltd. ▪ The Proposed Acquisition is expected to be completed in 4Q2020, subject to, inter alia, approval from unitholders of IREIT for the proposed acquisition at an EGM to be convened

Thank You

For enquiries, please contact:

IREIT Global Group Pte. Ltd. (As manager of IREIT Global) Tel: +65 6718 0590 Email: ir@ireitglobal.com

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